File This Under “Just Because you CAN, doesn’t mean you SHOULD”

I’ve been conducting my own little social experiment. For the past six weeks or so, I have kept every single credit card application or offer I received in the mail.

The results?

How insane is that???

I knew it was a lot before I started doing this, but seeing it all laid out really gave me something to think about. If I really wanted to, I could probably open up enough credit cards to finance just about anything. How about a trip to Europe? All those house repairs we’ve been wanting to do? Heck, a new house?!?!

But just because I CAN doesn’t mean I SHOULD. I’m not a millionaire. There’s no way I could pay that all off. And the credit card companies know that, which is why they send me so many. (And honestly, I think it has something to do with my credit score always teetering around their pre-approval threshold.)

I think a lot of people get tripped up by the idea that just because they are approved for something, it somehow means that it’s within their means or budget. You see this a lot with mortgages. Sure, maybe you can get approved for a $300,000 house. But are those monthly payments manageable with all your other monthly bills and expenses?

That’s why having a budget to go by is so, very, essential to every financial decision you make. Here are some great tools for that:

  • Every Dollar (this is my favorite, and what I use!!) – This is the tool Dave Ramsey recommends, and it’s a solid choice.
  • Mint – Great because you can import ALL your accounts and transactions, but the budget categorizing tool is a little clunky – it automatically categorizes some things incorrectly, so you have spend some serious set-up time getting it right
  • Good old fashioned Excel spreadsheets – Even with these tools, I still keep an excel spreadsheet of every bill I have, when it is due, and how much it costs. That way I know how much I need to have in my checking account on the 1st and 15th of each month to cover everything.
  • ANYTHING YOU WOULD ADD??? Let me know in the comments!

In summary? All that glitters is not gold. And yes, some of these offers literally glittered. And were quite alluring. IE:

PS – One of my friends suggested this wonderful service that lets you OPT OUT ENTIRELY from receiving mailed solicitations for credit cards. More info: https://www.optoutprescreen.com/

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